New Home Office Deduction Rules

New for the 2013 tax year is the simplified home office deduction rule from the IRS. Not only is it easier to determine but keeps things simpler if you sell your home in a later year. You basically take a standard deduction of $5 per square foot of your home that is used for business, up to a maximum of 300 square feet ($1,500).

You still take your full mortgage interest and property tax deductions in Schedule A but now you don’t have to allocate between business and personal use. If you do sell your home, you don’t have to recapture depreciation for the years you took the simplified deduction. Be sure to discuss this with your tax professional to see if you qualify.